Investment FAQs | Foundation East

Investment FAQs

Can I invest in CITR shares on someone else's behalf?

No. Tax relief is relevant to you/your business only.

 

Can I track the businesses my money has supported?

No. We will be unable to report exactly what proportion of which investor's money has supported which business/social enterprise. Information on the businesses we have supported will be provided through the members' newsletter, Annual Report, and on our website and Social Media platforms.

 

Who are the current members?

Our investors are individuals, corporates and institutions who;

  • Care about making a social impact with their money
  • Are interested in supporting local economic development
  • Have funds to invest which they can afford to risk, as all investments carry a level of risk
  • Are happy to trade a financial return for a social return
  • Recognise that mainstream funders can't help everyone
  • Value the work we do in supporting excluded businesses
  • Support the democratic decision making processes
  • Want to join us and work with us for the long term
  • Are UK taxpayers - if they wish to take advantage of Community Investment Tax Relief

 

Do you need me to provide ID?

To ensure compliance with Money Laundering Regulations, we are required to verify the identity of all membership applicants. As part of our online application process, we carry out an automatic online identity verification check. If you are an individual you may be required to provide your Passport or Driving Licence number. If this information is required you will be informed as you go through the application process.

 

How much can I invest in Foundation East?

With our share offer, as an individual or corporate investor/member, you can invest a minimum of £50 and a maximum of £100,000. For Co-operative Societies and Community Benefit Societies there is no upper limit. An investor/member can, at any time, increase their shareholding.

 

How will my investment be used?

100% of the money invested in Foundation East through this share offer will be used to provide loans to businesses and social enterprises in the eastern region.

 

What are the benefits of investing?

There are many economic, social and financial benefits through investing in Foundation East shares.

Some members invest to meet their company’s Corporate Social Responsibility agenda, some simply because giving something back to their community provides feelings of personal fulfilment. Some invest because it is an opportunity to support the development of local businesses. Some invest for tax efficiency reasons (CITR shares entitle the investor to a minimum of 5% per annum tax relief). Many invest for a variety of these reasons, or because they have had personal experience of financial exclusion in the past.

 

What is Community Investment Tax Relief (CITR)?

Foundation East is accredited by the Department for Business, Energy and Industrial Strategy (BEIS) to offer Community Investment Tax Relief (CITR). The relief is equivalent to a minimum of 5% of the value of your investment each year for five years. The investment must remain with Foundation East for 5 years in order to be eligible for CITR.

CITR equates to a pre Income Tax return of 6.2% for 20% tax payers, 8.3% for 40% tax payers, 9.1% for 45% tax payers and 5.8% for Corporation Tax payers.

Not all member investments have to be invested and/or be eligible for CITR. More information.

 

How do I claim CITR?

You can claim your tax relief after the tax year to which the claim relates has ended. You will complete your tax return at the end of the financial year and complete the additional information pages with your CITR Tax certificate information. For further help and guidance visit the HMRC CITR website here.

 

Will my money be tied up?

For Ordinary Shares you can request to withdraw them at any point however there is a 3 month notice period for withdrawals.

For CITR Shares, in order to receive any tax relief your investment in CITR shares must be left in place for five years to comply with the rules of Community Investment Tax Relief (CITR), after that it may withdrawn or reinvested.

 

What happens if the government changes CITR?

The rules in place at the time of your CITR share investment will hold for the first five years of your investment. At the end of that time there may or may not be rules in place that would apply to future investments.

 

Will my money be at risk?

Yes. Foundation East is not an authorised institution under the Financial Services and Markets Act 2000 or deposit protection scheme for investors/members.

 

What is the wider role of members?

The active participation of members adds tremendous value to the Society. It is welcomed, but not obligatory. 

Our members’ experience and skills have helped many businesses in the region to succeed and the people involved in these businesses to turn their lives around.

Here are a few words from a few of our members:
 
I sat in on a meeting between one of my clients and Foundation East. It was so refreshing to hear the application would be judged on the business case and the individual, rather than a remote credit scoring system, together with an offer of ongoing help and support, as opposed to simply monitoring.

- Brian Floringer, Partner at Lovewell Blake LLP
Certain shares in Foundation East qualify for a tax relief aimed at stimulating community investment. Becoming a member enabled me to obtain a good return (by way of tax reduction) and at the same time channel resources to new business ventures focused on wealth creation.

- John Parker, Individual Member
I wanted to work with SMEs and joining Foundation East gave me that opportunity. Foundation East support the local economy by providing finance to businesses. As a member I can become directly involved with the SMEs we support and I welcome the opportunity to see them develop. I am also helping Foundation East grow, evolve and continue much needed finance to the SME sector.

- Barry Van Eupen, Local Business Owner
The tax break is an attraction, of course, but it is a nice feeling to think I’m putting something back into the region.

- James Smith, Investor

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